McPallet: Supersize™ Your Business!A Pallet Company Owner Should Not Be Running His Plant from a Forklift.

By Ed BrindleyDate Posted: 3/3/2003

This year’s letters have been taking a more management focus. When I do not have a hot industry topic to share, I often turn to issues that are percolating in my own kitchen. As you might have guessed, Industrial Reporting is striving to make internal management changes that will make it a better business.

In the effort to improve efficiency, the company’s management team has decided to document details better. From employee job descriptions to production schedules to editorial planning, we are currently evaluating everything. Some bigger businesses often document everything but solve very little. On the other hand, like many small entrepreneurial businesses, we tend to answer questions, solve problems, and produce products in a more shoot from the hip management style. I believe we do a pretty good job. But what happens if key management personnel is out of the office for an extended period of time? Will the machine keep running or come to a stand still? Setting up systems and a culture of documentation brings greater accountability and employee empowerment to act without a manager having to micromanage every decision. Eventually, more attention has to be placed on developing systems and doing proper training if a company is to grow and reach its full potential.

McDonald’s™ stands out in my mind as an excellent example of how effective systems can revolutionize a business. How did Ray Kroc take the California restaurant, started by Dick and Mac McDonald, to its dominant position in the restaurant field today? He pioneered the franchising concept prevalent in the restaurant business today. He realized that he had to get off the operations line and work on the McDonald’s business model. He had to reproduce the successful restaurant model over and over again in cities and towns all over the country.

To be successful, the McDonald’s model requires detailed systems and training. The need for quantifiable systems and solid training are just as important in the pallet industry as they are in hamburgers. I am not suggesting that a pallet franchise is in order. In fact, a number of pallet networking companies or organizations have been tried in the last ten years. Most have failed.

Instead, I am pointing out that a pallet company owner should not be running his plant from a forklift. The plant should work like a well-oiled machine that runs efficiently in the owner’s absence. Systems do not eliminate the need for managers. Instead, good systems free owners and managers to grow the business. We can learn from other industries even though the operational details between hamburgers and pallets are vastly different. Principles and basic truths are stable throughout the business world.

Ray Kroc built a complete set of instructions for successfully operating a McDonald’s restaurant. This process starts with defining your business and all the activities necessary to successfully run it. Then, you divvy up the responsibilities with clear instruction describing how activities should be carried out.

Training is the second major step in McDonald’s success. Its Hamburger University is now a business legend. According to the McDonald’s Web site, over 65,000 managers have been trained about the details of the McDonald’s process at this corporate center.

Obviously, most pallet and sawmill businesses are not big enough to have their own university. But the principles are still the same. Your company will benefit from precise management systems and proper employee training. It can be difficult for an entrepreneur to let go of the controls. Empowering employees can bring sleepless nights, but I am learning to let go in order to make our business more profitable.

Next time you think about changes you need to make in your company, remember the McDonald’s success story. Instituting new systems and training can Supersize™ your business.

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